You work for a company that sells flowers. Each day, your company places an order with a flower distributor for flowers to be delivered the following morning, which you then sell in your store. The flowers have a shelf life of only one day, and at the end of the day you must sell any remaining flowers at a loss to a company that sells pressed flower petals.

You buy red roses from the distributor for $0.80 apiece, and you sell them individually for $3 each. Any roses that are left over at the end of the day, you sell for $0.40 each to the pressed-flower company.

Based on your experience in past years, you believe that the daily demand for your company's roses is normally distributed with mean 400 units and standard deviation 100 units.

In the above scenario about selling red roses, what is the underage cost per unit?
In the above scenario about selling roses what is the average cost per unit?
In the above scenario about selling roses what is the critical ratio?
In the above scenario about selling roses what is the optimal order quantity?